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Further to an earlier blogpost where I emailed Jordan Williams, at the Taxpayers Union, regarding Judith Collins’ taxpayer-funded trip to China, where she visited a milk importer (Oravida) of which her husband is the sole Director…

Kia ora,
I am aware that your Union recently condemned the cost
incurred by Green MP, Ms Mojo Mathers, in a trip she made to
Masterton to participate in a radio interview on
disabilities.
Accordingly, will you be investigating and commenting on the
trip made by National MP and Minister, Judith Collins, for
her recent taxpayer-funded trip to China?
Ms Collins' portfolios include Minister for Ethnic Affairs;
Minister of Justice; and Minister for ACC.
It is unclear what purpose was served by a trip to China as
none of her portfolios relate directly to foreign affairs
or trade.
Will you also be investigating and commenting on the
conflict of interest posed by her visit to Orivida - a
Chinese company of which her husband is a Director?
This appears to be little more than a tax-payer funded
'junket' and I await your response to this in the light of
your critical stance taken regarding Ms Mathers' trip to
Masterton.
Regards,
-Frank Macskasy

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Mr Williams, from the so-called Taxpayers Union, responded on the same day;

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Several commentators on my previous blogpost suggested that blogs are a part of the media (or “new media”) and that Mr Williams should, accordingly, be responding to my query as if the NZ Herald had contacted him for a comment.

I took note of the suggestions and wrote back to Mr Williams,

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FROM: "f.macskasy" SUBJECT: Re: Judith CollinsDATE: Sun, 16 Mar 2014 12:37:51 +1300TO: "Jordan Williams" <jordan@taxpayers.org.nz>.Kia ora Jordan!
Thank you for taking the time to respond to my query, and in
such a timely fashion. That was greatly appreciated.
Regarding your point on the Mojo Mathers issue; I understand
that you stated you did not initiate contact with the
Herald, and that you responded to their query.
As you may be aware, I blog on various issues, including
covering public activities such as Select Committee
hearings; protests; etc.
I am therefore part of the so-called "new media" of citizen
journalists/bloggers, as your colleague, Cameron Slater also
maintains.
Accordingly, I seek a response from you, on behalf of the
Taxpayers Union, on National MP and Minister, Judith
Collins' recent taxpayer-funded trip to China.
It is unclear what purpose was served by a trip to China as
none of her portfolios relate directly to foreign affairs
or trade. Ms Collins' portfolios include Minister for
Ethnic Affairs; Minister of Justice; and Minister for ACC.
Considering that none of her portfolios relate to foreign
affairs or trade, was this trip necessary? What purpose did
it serve, and for who?
What is the Taxpayers Union's response on the
perceived/actual conflict of interest posed by her visit to
Orivida - a Chinese company of which her husband is a
Director?
Does the Taxpayers Union view Collins' trip as little more
than a tax-payer funded 'junket'?
Does the Taxpayers Union consider the $36,000 spent by
Collins on this trip "value for money"?
I look forward to the Taxpayers Union's statement on this
issue.
Regards,
-Frank Macskasy
Blogger

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As at 11.59PM, on 18 March, I have received no further correspondence from Mr Williams, nor from any other representative of the Taxpayers Union. Not even a simple acknowledgement of having received my 16 March email.

It is interesting to note the circumstances surrounding this issue.

I emailed the Taxpayers Union because it had commented – and roundly condemned – Mojo Mathers’ flight from Christchurch to Masterton, to attend a radio interview on the issue of disabilities.

On 2 March, Jordan Williams made this statement on the resulting furore surrounding his remarks on Ms Mathers’ travel;

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This morning there has been some criticism of my comments in a story on the Herald website about a trip Mojo Mathers took to Masterton from Christchurch apparently just for a short interview on a community radio station.

For clarification:

The Taxpayers’ Union did not seek media attention on this story. There is no associated press release. The Herald called yesterday evening asking for comment, as happens often.

The Taxpayers’ Union operate 24 hour media line for comment on taxpayer issues. Yesterday’s call came through to me and I was asked whether it was value for money for an MP to fly 800km for a radio interview on a small community station. I said it was not value for money when the interview could have been done on Skype as well as the comments that are quoted in the story.

I’ve made no comment about Ms Mathers disability. In fact, if the travel was necessary I would not criticise the spending. But answering questions posed by the Herald, on matter which as far as I know are completely unrelated to her disability, is legitimate.

Accusations that I (or the Union) sought to go after Mathers are ridiculous. To repeat, we were asked for comment by the Herald who were running the story. The comments would have been the same whoever the MP.

Accusations that the Taxpayers’ Union are partisan are also silly. I am proud that the Union has gone after National MPs and the current government for expenses, wasteful expenditure and corporate welfare. Seehttp://info.scoop.co.nz/New_Zealand_Taxpayers’_Union

On reflection, I wonder why an MP from a party that prides itself for having a low environmental footprint choose to fly to a radio interview that could have been done on Skype. Perhaps Ms Mathers had other engagements in Masterton. If so, that was not the information provided to me at the time by the Herald reporter.

Jordan Williams.

Jordan Williams

Author

Note Mr Williams’ statement;

Accusations that the Taxpayers’ Union are partisan are also silly. I am proud that the Union has gone after National MPs and the current government for expenses, wasteful expenditure and corporate welfare

Aside from a handful of press releases aimed at National Minister, Steven Joyce, most of the Taxpayers Unions public comments seemed to target Auckland mayor Len Brown; government departments (whilst not mentioning their Ministers); and strangely, the Labour Party – which is not even in government.

The Taxpayers Union has not commented on Judith Collins’ trip to China, despite there being glaring questions which demand to be asked. Questions such as why a Minister of Justice/Ethnic Affairs/ACC felt the need to spend $36,000 of taxpayers’ money on a junket overseas.

Mr Williams has not deigned to respond to my queries with a comment.

Yet, he was only too happy to launch into a savage excoriation of Green MP, Mojo Mathers, for spending an estimated $500 to speak on an issue that was actually her portfolio – and which, because of her disability, is a matter she is intimately familiar to speak on.

One can only assume that Mr Williams does not wish to be drawn into this issue. The reason is quite apparent.

Right-wing blogger, David Farrar, is one of the Board members of the Taxpayers Union. His ‘bio‘, however, mentions nothing about his close links to the National Party,

“David is a well known political blogger and commentator. David also owns and manages the specialist polling agency Curia Market Research and has an active involvement in Internet issues. He is an experienced political campaigner and former parliamentary staffer.

“I helped form the New Zealand Taxpayers Union because I believe that New Zealand needs a lobby group to stand up for the rights of taxpayers and ratepayers, and fight against those who treat them as a never ending source of funds”.”

“Since I joined Young Nationals in 1986, I have been affiliated to, and a member of, the National Party. I do not regard National as always right, but it is the party which I believe gives me the greatest opportunity to achieve the New Zealand I want.

As a volunteer, I established National’s initial Internet presence in 1996 and have held various roles in the party up until 2005. I have three times been a temporary contractor to National HQ, helping out with the campaign in 1999, and also between staff appointments – in 2004 and 2007 for a total of ten months.”

” Moreover, only an estimated 93.2 per cent of the 3,276,000 people who were eligible to vote were enrolled, so the 2,254,581 people who did cast their votes (including special votes) leaves just over 1 million who stayed at home. “

John Key’s “mandate” is roughly one quarter of the country’s population.

The Nats can dress that up any which way they like, but that’s not a mandate. That is a minority in drag, masquerading as a “majority”.

But still a minority.

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National Conference

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Let’s cut to the next ‘chase’.

The recent National Party Conference in Skycity had nothing to do with conferencing or the Party’s internal workings. It was purely and simply a public relations exercise to raise “troop” morale and present National in a positive light to the public.

It was about appearing decisive and on-message. It was about strong leadership and confidence, reminiscent of Rob Muldoon, and Dear Leader played his part perfectly as he gave the rallying cry to his fellow MPs and Ministers.

Key thundered,

“Our policy of partial share sales is a win-win and I stand totally behind it.”

After months of various scandals, resignations, disastrous flip-flops, and gaffes, the Party pulled out it’s “ace-in-the-hole” – John Key. “The Boss” laid down the law, and as Tracey Watkins from Fairfax said,

“No more tip-toeing around. That is the clear message from National’s annual conference, where the Government’s economic programme has been invested with a new sense of urgency.”

Ms Watkins tends to present political issues from a position favourable to National and her piece on 23 July was no exception. But she also had a valid point – National was fighting back. They were on a counter-offensive on several fronts.

But as the dust settled, and the “whizz-bang-gosh!” factor faded, the public’s momentary distraction returned to the issues and problems currently confronting us as a nation.

As much as Dear Leader might wish it, those issues and problems will not go away.

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State Asset Sales

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National is desperate to sell this lemon to the public as a going concern. Indeed, the issue was presented as one of several issues on a leaflet/questionnaire that the Parliamentary wing of the Party mailed out,

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The Nats are sensitive to recent public protests and an ‘insider’ advises this blogger that Ministers are tracking correspondence; internal polling; and letters-to-editors on the subject.

In an effort to “sweeten” the deal and to assuage public opposition, National is offering,

preference to “mum and dad” investors

a three year loyalty share-bonus scheme

a minimum of $1,000 dollar share parcels

a guarantee of shares to New Zealand investors wanting parcels of up to $2,000

Treasury setting up a retail syndicate of share brokers and banks to help first time share investors potential investors.

National’s “carrot” is matched by it’s “stick”. As Bill English threatened in June last year,

“We are saying that New Zealanders are at the front of the queue, but if not enough of them show up, it won’t be 49 per cent. I wouldn’t want to exactly guarantee every share but we have got to look at how to make that happen.”

So the message is crystal-clear; ‘If we don’t buy these assets (which we already own), John Key and Bill English will sell our companies to overseas interests’. It’s like watching a rather bad, cheaply-made, B-grade gangster movie from the 1940s.

But the ‘rort’ doesn’t end there. Treasury estimates that any loyalty scheme will end up costing taxpayers up to half a billion dollars. That’s because giving away free shares as a “loyalty bonus” still incurs a cost – nothing is for free,

” A “loyalty” scheme to sweeten state assets sales for investors could cost the taxpayer $500 million – more than $100 for every man, woman and child in New Zealand – according to Treasury numbers.

[abridged]

In a report to the Cabinet last year, the Treasury said incentives to encourage local investors to buy shares “typically range from 5 to 10 per cent of total value ($250 million to $500 million based on a $5 billion programme)”.

The Government says it expects to raise $5 billion to $7 billion via the sales programme.

Based on the Treasury’s $500 million upper estimate of the cost of a loyalty scheme, the forgone revenue works out to just under $113 for every man, woman and child here. “

” Effectively, the taxpayer will be paying for a loyalty scheme that a small number of New Zealanders who can afford to buy shares will be able to enjoy. It’s clear there’s some real winners here, and the losers are most New Zealanders. “

Based on the Queensland experience where Queensland Rail was privatised in 2010; where a share-bonus loyalty scheme of 1:15 shares was used; the cost to Queensland taxpayers would be $360 million, according to our Parliamentary Finance & Expenditure committee. To which Key was reported as saying, that the figure was,

“… a possible number. I haven’t seen their workings so I wouldn’t want to agree with that at this point.”

First point: that report on the Herald’s website was posted at 12:18pm on the same day; Tuesday 24 July, 2012. Not quite seven hours had passed before National’s spin-doctors had noticed Key’s blunder, and Dear Leader changed his stance.

Second point: the figures were not from the Labour Party, nor The Greens. They were Treasury’s figures.

Was this a deliberate attempt to undermine the credibility of those figures by shifting it’s provenance from Treasury to opposition parties?

Key then made this extraordinary comment,

“If you think about the entire float that could be in the order of $5 billion to $7 billion. Let’s argue that it’s $5 billion for a moment if you then turned around and said about 20 per cent of that could be for mum and dad, it could be more it could be less – but just for the purposes of maths that’s a billion. If you apply the Australian Queensland model that’s one in fifteen shares – that’s 6 per cent. Six per cent of a billion is $60 million for the entire programme.”

“20 per cent “?!?!

What happened to the 49% that Key and English have allocated to “mum and dad” investors,

“Counting the Government’s controlling shareholding, we’re confident 85-90 per cent of these companies will be owned by New Zealanders, who will be at the front of the queue for shares.”

This is disengenuous of Dear Leader. On the one hand, National is claiming that 49% of shares will be allocated to local “mum and dad” investors – and on the other, they are calculating a bonus-share loyalty scheme on a figure of 20%. Key is shuffling figures around and quoting them to suit daily events.

This is not the first time Key and English have done this.

In January last year, when John Key announced National’s policy to part-privatise five state assets, he stated,

“If we could do that with those five entities … if we can make some savings in terms of what were looking at in the budget and maybe a little on the upside you’re talking about somewhere in the order of $7 to $10 billion less borrowing that the Government could undertake.”

The figure of $7 billion to $10 billion proceeds from a partial asset-sale then shrank,

“First, the Government gets to free up $5 billion to $7 billion – less than 3 per cent of its total assets – to invest in other public assets like modern schools and hospitals, without having to borrow in volatile overseas markets.”

“If we did get $6 billion, that would be a gain of sale [of $800 million] which is just a product of the accounting. I just want to emphasise that it is not our best guess; it’s just a guess. It’s just to put some numbers in that look like they might be roughly right for forecasting purposes...”

Key did precisely the same thing over the Skycity-convention centre-pokie machine contra-deal.

He advised the country that building a new convention centre (in return for changing the law to allow up to 500 additional pokie machines for Skycity), would result in up to 1,900 new jobs in Auckland,

“It produces 1000 jobs to build a convention centre, about 900 jobs to run it, and overall the number of pokie machines will be falling although at a slightly lower rate.“

Unbelievable that a number of New Zealanders still believe that National is a sound manager of the economy. These muppets couldn’t run a corner Dairy – they simply wouldn’t have a clue how much to charge for a packet of chippies.

No wonder Labour Leader David Shearer expressed his frustration at Dodgy John’s slippery numbers, when he said,

“We absolutely have no idea how much this loyalty scheme is going to cost New Zealanders. He was happy to go out and announce the loyalty scheme at the National Party conference but he’s not prepared to come out with the numbers now.”

Either way, National is keeping information on asset sales secret – or they have no idea what’s going on. Conspiracy or cock-up – neither option is particularly reassuring.

The ground keeps shifting, and this blogger believes it is a deliberate ploy to deny information to sales-critics and the public. Without solid information, it becomes harder to mount a sound critique of National’s plans – though BERL has done a fairly reasonable job of it.

Accordingly, this blogger invites “mum and dad” investors to exercise caution as shares are made available to the public,

A Possible Solution?

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As BERL stated in their report, selling state assets will eventually impact on the government’s balance sheet. Quite simply, any short-term gain through sales proceeds will eventually be whittled away by reduced dividends from half of these state assets sold into private ownership,

” The interim loss of earnings resulting from reduced dividends and the period of time before the new assets reap benefits is never recouped. “

Plain english: we will lose money on the deal.

Selling any of these State assets defies understanding.

As Treasury stated last year, the revenue stream is quite significant according to their own SOE Economic Analysis that, “…on average, the SOEs have performed favourably when compared to the averages for the quartiles computed for the benchmark companies“.

On average, Treasury show a 14.5% average shareholder (Government) return. Compare that to other investments, and it’s a fairly remarkable achievement for state enterprises which – according to free marketeers – are not supposed to operate more effectively than private enterprise.

In a further, surprising turn of events, in February 2001, Finance Minister Bill English agreed, stating,

“Generally the SOE model has been quite successful in that respect.”

And even went so far as to complain that they were making excessive profits! (There’s no satisfying the National Party!? They sell under-performing state assets, explaining that the “market will improve their performance” – and then complain when state assets are making too much money! Then the Nats will flog them off to reduce returns and make them more “competitive”.)

National has stated several reason for wanting to sell 49% of Meridian, Genesis, Might River Power, Solid Energy, and further down-sell Air New Zealand – but their main, carefully-worded, rationale has been to “reduce debt/invest in new assets/infrastructure”, according to Bill English,

“We are firmly focused on keeping the Government’s overall debt as low as possible and that is the most important consideration over the next few years.”

If National is planning on extracting $6 to $7 billion from most New Zealanders’ pockets, then they are dreaming. A small minority (the 1%, as usual) might have the resources – but even they, I suspect would have to off-load their own assets to buy into the five offered SOEs.

It is more than likely that, like Contact Energy, the majority of new shareholders will be corporate and/or offshore investors. New Zealanders simply don’t have the savings to buy their own energy comnpanies and airline.

If National wants to realise $6 to $7 billion from partial-privatisation and is serious in not wanting major foreign ownership, then it has only one other option: the NZ Superannuation Fund.

Selling half of five state assets to the NZ Super Fund would achieve several desired goals,

Keep state assets in New Zealand ownership

Prevent an outflow of profits to offshore investors, which would worsen our current account deficit

Satisfy Maori that water resources were not about to be privatised, and therefore any claims before the Waitangi Tribunal could be set aside

Fulfill a government-ordered directive that the NZ Super Fund invest more heavily in New Zealand

In May 2009, Finance Minister Bill English wrote to the NZ Super Fund, instructing that,

” The Government believes that is is in the national interest for the Fund to have significant interests in New Zealand. Consequently, persuant to section 64 of the New Zealand Superannuation and Retirement Income Act 2004 (the Act), I direct the Guardians to note that it is the Government’s expectation, in relation to the Fund’s performance, that opportunities that would enable the Guardians to increase the allocation of New Zealand assets in the Fund should be appropriately identified and considered by the Guardians. “